Dr. Zargari

The Legendof

Edwards DemingBy:

Dr. Farhad ZargariGeneral Manager,

International Affairs Department,Social Security Organization, I.R.Iran

drzargari@gmail.com

Dr. Zargari

Presented to ILO Course: A 9-00025

Quality in Social SecurityMay 2003 Turin, Italy

Dr. Zargari

Dr. Zargari

Profile Slide 1 of 2

W.Edwards Demming was a world famous `professor whose concepts and methods dramatically altered the economy and working methods of Japan. He was virtually unknown in his native United States until his expertise in quality management was noticed and applied by the Ford Motor Corporation. Subsequently, he helped many, many companies in various industries to turn around their productivity and competitiveness the effects of which are still felt in the world and economy today.

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Profile Slide 2 of 2

Introduced concept of Quality Circles in Japan in 1950’s

His concepts did not become implemented in the US until the 70’s and 80’s

He taught the use of statistical analysis to make quality improvements

Quality Circles were structured groups of four to fifteen employees

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Deming’s Theory of Management Decentralization Participatory Management Managers should improve the system The common language for managers

and workers is elementary statistics,

which all workers learn.

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DEMING’S CHAIN REACTIONImproveQuality

CostsDecrease

ImproveProductivity

DecreasePrices

Increase MarketShare

Stay inBusiness

ProvideJobs and

More Jobs

IncreaseReturn OnInvestment

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Deming’s Quality Philosophy

Developed a management system based on top-to-bottom quality transformation.

Keys to success: Teamwork Training Committed leadership of top management

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Demming’s formulation of his Fourteen Points is seen by many as the management equivalent of the “10 Commandments” . Like many quality driven approaches, the fourteen points take a holistic view of an organisation, how it works, and its relationships with its stakeholders.

Demming’s 14 Points for the Transformation of Management

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Create constancy of purpose towards improvement of quality of products and services, with the aim to become competitive, to stay in business and to provide jobs.

Point 1

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Notes on Point 1 For Demming, the idea of constancy revolves around the customer. Success depends on how well a company evaluates its processes, products and markets in order to understand future customer requirements. On a macro level this entails long term commitment to invest and adapt to changes in the market place. On a micro level, it means fine tuning of every function around changes in strategy that may be needed to meet long term market needs

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Adapt new philosophies. Management must awake to new challenges, learn their responsibilities and take on leadership for change. Adopt philosophy of prevention.

Point 2

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In Demming’s view, the concept of “quality” becomes the mission. Quality means giving the customer what he or she has a right to expect. Business cannot afford to tolerate mistakes, defects, poor workmanship or anything else that detracts from “quality”. Defects of any type are costly, reliable products reduce costs.

Notes on Point 2

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Cease reliance on mass inspection to achieve quality. Eliminate the need for mass inspection by building quality into the product in the first place.

Point 3

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Dependency on inspection at key points in a process to ensure quality is too late, expensive and ineffective. With this type of policy, companies are paying workers to make mistakes and then correct them. “Quality comes not from inspection but from improvement of the process”.

Notes on Point 3

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End the business of awarding business on the basis of price tags. Instead include quality and minimize total cost. Move towards a single supplier for any one item, based on a relationship of long term loyalty and trust.

Point 4

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Price has no meaning without a measure of the level of quality being delivered. An example is the purchase of a product after a tender process from the lowest bidder without careful attention to specification. This can only increase costs elsewhere. When the concept of quality becomes the central focus, the idea of buying from the lowest bidder gets abandoned. Demming insisted that the principle of close co-operation between customer and supplier would inevitably lead to a process of continuous improvement.

Notes on Point 4

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Improve constantly and forever the system of production and service to improve quality and productivity, then thus constantly decrease costs. You should constantly improve system and workers

Point 5

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Demming believed that each product should be regarded as “one of a kind” and that there is only one chance of success. In his view the concept of “quality” should be built in at the design stage and team work in design is fundamental to the process. Demming was an exponent of the “Shewhart” cycle as an approach to process analysis and improvement.

Notes on Point 5

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The “Shewhart” cycle can be summarized as follows:•Plan a change of what needs to be improved•Carry out the change on a small scale•Observe the result•Study the results and decide what can be learnedThe underlying concept in simplistic terms is : Plan-Do-Check-Act…...

Notes on Point 5

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The Deming Wheel

Identify problemDevelop plan for

improvement

Implement plan on test basis

Is the plan working

Institutionalize improvementcontinue cycle

1. Plan

2. Do

3. Study / Check

4. Act

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Institute training on the job.

Point 6

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Too often workers learn their skills from other workers who themselves have inadequate training. It is useful to train as many workers as possible to recognize when a system is drifting out of control. Workers can do this more efficiently than quality engineers. In addition, workers and managers need to be trained to identify improvement opportunities.

Notes on Point 6

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Institute leadership. The aim of supervision should be to help people and machines to do a better job. So instill leadership among supervisors.

Point 7

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Demings ideas of leadership revolve around the concept of turning the role of managers and supervisors from policeman to trainer. Since lead management plays a key role in the realization of quality, management reviews should include discussion on problems and potential solutions.Lead managers should not judge workers on their performance, instead they should look at their own performance to see how that can improve the effectiveness of others.

Notes on Point 7

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Drive out fear, eliminate finger pointing, promote idea expression so that everyone may work effectively for the good of the organisation.

Point 8

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Coercion or management through fear is destructive. It impedes production and interferes with quality work. People cannot perform at their best unless they are secure and are not afraid to express their opinions and fears. Workers who fear their managers or supervisors may well produce the minimum required, but they will not achieve “quality”.

Notes on Point 8

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Break down barriers between departments. Develop team approach and multidisciplinary quality control circles. People in research, design and production must work as a team to foresee problems of production and use that may be encountered with product or service.

Point 9

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Breaking down barriers between staff is a matter of team work. There is a lot of truth in the parable that an “elephant is a mouse designed by a committee, that did not talk to the creator”.

Notes on Point 9

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Eliminate slogans, exhortations and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create antagonistic relationships because the bulk of the causes of low quality and production are a fault of the system and are often beyond the power of the work force.

Point 10

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At first glance such exhortations seem harmless. According to Demming however, such exhortations are aimed at the wrong people. They advertize to workers that management is unaware of the barriers to pride in workmanship, thus creating antagonistic relationships. Because most causes of low quality are systematic, the power to effect improvement lies beyond the work force. Workers can do little to change the system, the burden of improvement rests with management.

Notes on Point 10

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Eliminate quotas on the factory floor, do not evaluate individuals for problems, query groups for solutions. Eliminate management by numbers and numerical goals.

Instead substitute leadership.

Point 11

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The problem with management by objective (MBO) is that an organisation can achieve almost any objective given appropriate resources. The issue is that workers can only function as well a circumstances permit because they focus on the goal rather than the process. Peer pressure will often mean that good workers will do achieve the average, where poorer workers will never achieve the mean. The way to improve production is to improve the system and find out who is having problems.

Notes on Point 11

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Enhance worker pride. Remove barriers that rob hourly workers of their right to pride in workmanship. Give them the tools and training to do it right, i.e. SPC etc. The role of supervisors must be changed from monitoring numbers to creating “quality”.

Point 12

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Often managers do not understand the issue of pride in workmanship because they do not focus on the human processes behind a product or service. Demming believed that performance rating systems were inherently unfair as over time, providing the system was refined and predictable, most workers will perform at the same level, only a few would deviate.

Notes on Point 12

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Institute a vigorous program of education and self improvement.

Point 13

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Although this is similar to point six, the thrust of this point is that educating and improving the knowledge of the workforce enables them to understand the impact of future challenges and to come up with their own solutions

Notes on Point 13

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Put everybody in the organization to work to

accomplish “quality”. “Quality” is the job of everybody. EVERYONE WORKS TO

TRANSFORM THE COMPANY

Point 14

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According to Demming, the first and most important step on the road to quality is achieved when everyone understands the importance of the fourteen points and becomes an active participant in their implementation. Every job in an organization is part of the production process, and to achieve the necessary transformation everyone must be committed to analyzing every step, because only by understanding the role of each job in the company’s strategy can the production process be improved.

Notes on Point 14